Analysis: Lofty administrative goals not attained by bills

It has been said that the two sets of administrative reform bills moving on to the Upper House will bring about Japan’s most sweeping reforms in 100 years and end the bureaucracy’s dominance over the administration.

In truth, the bills’ effect will most likely be limited.

On Thursday, the Lower House passed 17 bills to reorganize the 22 existing government ministries and agencies into 10 ministries, two agencies and one commission. On the same day, revisions to 475 bills to disperse state power to local governments were also approved by the Lower House’s special committee on administrative reforms and are expected to clear the Lower House today.

The bills were initially intended to drastically slim down Japan’s central government and make it more efficient and transparent — and transfer more power to local governments. But critics claim those goals are unlikely to be achieved.

“Without reforming the government’s budgetary system and public works projects, it would be impossible to bring meaningful changes to the Japanese system,” Takayoshi Igarashi, professor of law at Hosei University, said.

The number of ministries will be drastically reduced and the shape of the central government will certainly appear different by January 2001. However, the changes give the impression that the ministries will only be rejiggered without reviewing their tasks and jurisdictions for greater efficiency.

As an example, Igarashi brings up the new National Land and Transport Ministry, which isn’t really new but rather the result of the merger of two ministries and two agencies dealing with public works projects.

Rather than help bring about a streamlined and decentralized power structure, Igarashi says, the merger will create a huge ministry with about 68,800 officials with dominance over public works projects worth several trillions of yen annually.

What’s more, he says, the emergence of such a powerful ministry will entice “zoku giin,” tribal politicians who speak for specific interests, to try to secure a greater portion of the national budget pie.

There’s more. It could force even more municipal officials to make pilgrimages to Tokyo’s Kasumigaseki administrative district and kowtow to even more powerful ministry officials in hopes of securing funds for local projects.

While some scoff at the bills for making the bureaucracy even more powerful, others lament that it does little to alleviate vertical divisions that have long been severely criticized for lacking efficiency and wasting government expenditures.

For example, while the building of sewage systems for residential areas falls under the jurisdiction of the Construction Ministry, constructing sewage system for farms is the job of the Ministry of Agriculture, Forestries and Fisheries.

Divisions between the Health and Welfare Ministry, which oversees nursery schools, and the Education Ministry, which is responsible for kindergartens, will continue to exist even under the new legislation.

“These important issues had never been discussed in the Diet deliberation process. Politicians only gulped the proposed bills as they were without reviewing functions of each ministry,” said Shino Namikawa, secretary general of Gokaku Kokumin Kaigi (Citizens Forum for Renewal), a body that has been proposing reforms for various Japanese systems.

The government’s administrative reform efforts were first launched in 1996 by then Prime Minister Ryutaro Hashimoto as one of six projects to transform Japanese society into one that can better cope with the changing times.

Hashimoto also embarked on overhauls in the nation’s fiscal structure, economic structure, financial markets, social security system and education system.

Although recognizing that bureaucrats were the locomotive for Japan’s growth in the 20th century, Hashimoto felt the system would no longer be able to enhance growth in an era of global competition, so he placed priority on reviewing existing regulations and the bloated jobs of ministries in spearheading administrative reforms.

However, during the process leading up to the formation of the bills, the original principle was obscured as the reform plans met strong resistance from the same bureaucrats and lawmakers with interests linked to certain ministries.

Reorganization of the ministries is also unlikely to bring significant changes to the budget-compiling process.

Experts say efforts to prevent the Finance Ministry from fully dominating the budget-making process by establishing an economic and fiscal council under the Cabinet Office may be a good idea, but it is not guaranteed to work effectively without the emergence of a prime minister with strong leadership.

According to the bills, the council, headed by the prime minister and comprised of people from the private sector, will draft basic policies on budget formation and fiscal management — powers the Finance Ministry currently enjoys.

Namikawa argues that this change will not make much difference if the power to actually allocate the budget remains in bureaucrats’ hands.

Under the existing system, 70 percent of tax revenue goes into central government coffers and half of that is returned to local governments as subsidies, enabling the central government to exert control over local governments.

“To truly bring about meaningful change, decentralization of such (budget allocation) power must take place,” he said, adding that a system where local governments have an independent source of revenue is needed to give them more autonomy.

Since beefing up municipal finances is not spelled out in the decentralization bills, Prime Minister Keizo Obuchi has already expressed readiness to work on legislation to reorganize finances for local governments.

“We’d like to submit bills to the Diet as early as possible to strengthen municipal finances in line with the planned transfer of some power from the central government to local governments,” Obuchi told a Diet committee session.

As Obuchi and Home Affairs Minister Takeshi Noda acknowledge that the two sets of bills are only the first step to improving the administrative system, the massive task of tackling reforms left untouched is likely to depend on future government work.

At the same time, experts point out that initiatives by local governments are also essential in getting decentralization off the ground.

“Local governments were very enthusiastic about decentralization until many of them started to suffer from serious financial woes in 1997 and 1998,” Hosei’s Igarashi said. “After that, they turned to the central government for more subsidies, and not many local politicians nowadays comment outright on the issue.